Stations build up ‘beachfront’ property

Real estate boom under way in broadcast TV

The nation’s housing market may still be in a deep slump, but there’s a seemingly unrestrained real estate boom under way in broadcast TV.

Station owners and program distributors are finally getting serious about developing the potential of the digital multicast channels that so many broadcasters have been sitting on for years.

With the transition to digital broadcasting, most full-power TV stations have the bandwidth to offer as many as four to six digital multicast channels in addition to their mothership signals. It amounts to an extraordinary windfall of advertising-supported programming opportunities for ambitious station owners and entrepreneurs.

Atlanta-based Bounce TV is the latest startup to join the land rush. The channel, set to bow Sept. 26, aims to target African-Americans in the 25-54 demo with a mix of movies, TV reruns and college sports.

A number of fledgling outlets have taken a page from the old Nick at Nite playbook — acquiring inexpensive, vintage series and dressing them up with goofy interstitials that play well with TV fanatics.

In January, Tribune Broadcasting launched Antenna TV, while Chicago-based Weigel Broadcasting kicked off the national rollout of its Me-TV service that has operated for several years as an offshoot of its WCIU-TV Chicago. Weigel has been a multicasting pioneer, partnering with MGM in 2008 to launch the movie-centric This TV digital channel.

Among the Big Four O&O groups, ABC has been the most active in developing original programming under the Live Well Network banner — a mix of lifestyle, entertainment, foodie and travelogue fare.

With all the production infrastructure and talent available through the net’s eight O&O stations, ABC execs felt a sense of urgency to harness their untapped resources.

“We kept saying to ourselves that it’s like we own beachfront property but we don’t even have a shack on it,” says Emily Barr, prexy and g.m. of ABC’s WLS-TV Chicago, who spearheaded the launch of Live Well in April 2009.

Although TV’s transition to all-digital broadcasting was completed in June 2009, many stations were slow to move ahead with subchannels because the local ad market was in such bad shape at that time, and because there wasn’t much to choose from for stations that didn’t want to invest in producing or even repurposing their own material.

Now, however, broadcasters have another incentive to fill up those digital slots. The FCC wants to auction off some of the digital spectrum allocated to broadcasters for wireless services, as it warns of a looming broadband service crunch. TV station owners will have a stronger case to make for holding on to every bit of their scarce resource if they’re carrying an array of outlets — especially those reaching underserved TV viewers like Bounce’s target aud.

Local broadcast stations “have an intense need for meaningful programming for their digital signals,” says Bounce TV prexy Ryan Glover, a former Turner Broadcasting exec. “Plus, there’s never been a television network targeting African-Americans available for free, over the air. We see that as the business opportunity.”

The business model for the nationally oriented services is essentially barter syndication writ large. Stations give up a portion of their advertising inventory in each hour (typically a 50-50 split) in exchange for the programming. The distrib packages those spots for national advertisers, while the affiliates handle local sales.

ABC specifically designed Live Well to be free of any Alphabet or Mouse House imprimatur in order to make it attractive to non-ABC affiliate stations. By year’s end, it’s projected to be carried on stations covering 45% of U.S. TV households and, most important, it is already turning a profit, Barr says. Bounce TV projects it will be available in more than 50% of the U.S. at launch.

The biggest challenge for the new services is marketing (of course) and securing carriage beyond over the air. So far, cable is spotty and the services are nonexistent on DirecTV and Dish.

In contrast to ABC’s approach, NBC’s focus has been on the hyperlocal sector with the region-specific channels it has rolled out on its O&Os during the past year (Nonstop New York, Nonstop Philadelphia, Nonstop California, etc.).

CBS is about to take a similar tack, starting later this month with the launch of a subchannel in New York that will draw content from WCBS-TV as well as the Eye’s Gotham radio outlets. Subchannels for KCBS-TV Los Angeles and other Eye O&Os in major markets will follow soon.

Fox has yet to publicly unveil plans for digital subchannels on any of its 27 outlets. But that is likely to change as its competitors get busier in the arena.